Jose is a young college graduate from Missouri. He has hopes and dreams for his future, but he also has a plethora of student loans. One personality fault in Jose is his inability to make decisions. He spent a number of extra years at college simply trying out various majors and career options. Finally, Jose settled for a major in business. This allowed him to obtain a career as a car salesman.
During his time at the automotive dealer, Jose worked hard. He knew he could make more money, if only he did his best every day. Commission was a big help in the early months when his salary was barely enough to cover the bills. One of those bills was his monthly student loan payment. Jose struggled with these payments, as many graduates do.
Thankfully, there are many options for Jose and people in his situation. First and foremost, there are different repayment programs available than the standard ten year program offered by federal loan providers. There are programs that are completely income-based. With this service, monthly bills are determined based on a person’s income. Normally, these monthly payments will be less than under the standard repayment program. However, it will often take longer than ten years to pay off all of the loans. Interest will be accruing during this time period. Graduates who take this route may end up paying more in the long run. However, they are better able to pay their monthly student loan bills.
Yet another option could be refinance. Refinance is the consolidation of a number of loans into one. This allows for one monthly payment, rather than multiple. Since Jose had so many loans, this was the option he decided to take. Fortunately, Jose is smart, and he did his research. Shopping around for the right refinance options for you is important. The wrong move would be to refinance and have the monthly payment be higher than it was originally. This is a circumstance that could happen. It is also best to refinance if a fixed interest rate is available. This way, interest rates will not go up over the years. They also will not go down. However, the United States is seeing some of the lowest interest rates in decades, so this is not a terrible thing. A variable interest rate will allow your rate to rise over the years based on standards in the economy. A hike in interest rates could mean much more money for you to pay.
Jose was able to refinance his loans, offering him a fixed interest rate and a lower overall monthly payment. The same can be done for anyone in Jose’s situation. There are many other options available to struggling graduates as well. A phone call to the loan servicer would do well in helping to make those monthly payments. They can consult with you on the best possible options in repayment for your unique situation. There is help out there, you just need to look for it.